Google made $4.7bn in advertising from news content last year, almost as much as the revenue of the entire online news industry, according to a study released on Monday.
According to the News Media Alliance, between 16% and 40% of Google search results are news content. Google’s revenue from its distribution of news content is only $400m less than the $5.1bn brought in by the United States news industry as a whole from digital advertising last year.
The industry body warned that the figures may in fact be conservative, since the report does not seek to include the value of users’ personal data each time they use the search service to click on a story.
But the study’s methodology has been met with skepticism in some quarters. Bill Grueskin, professor of practice at Columbia University’s prestigious journalism school described the News Alliance’s $4.7bn revenue claim as “fuzzy, at best”.
“The researchers appear to take a random, 2008 comment made at a conference, about Google News’ value, and extrapolate that to come up with a number that’s supposed to represent how much revenue that Google has made off the news business,” Grueskin told the Guardian.
“I don’t doubt that big tech companies deserve scrutiny for their oversized role in the advertising business,” Grueskin added. “But a trade group that represents the news business ought to have standards that match those of the reporters and editors they’re trying to support.”
Google also criticized the study, arguing that it ignored the value Google provides and describing the calculations as “inaccurate”.
“Every month Google News and Google Search drive over 10 billion clicks to publishers’ websites, which drive subscriptions and significant ad revenue. We’ve worked very hard to be a collaborative and supportive technology and advertising partner to news publishers worldwide,” a Google spokesperson said.
Still, the report serves to underscore the news media’s increasingly uncomfortable reliance on big tech for distribution, and exacerbate its long-held gripe that companies like Google, Facebook and Apple are disproportionately profiting from the arrangement.
“News publishers need to continue to invest in quality journalism, and they can’t do that if the platforms take what they want without paying for it,” said David Chavern, the alliance’s president, in an accompanying statement. “Information wants to be free, but reporters need to get paid.”
Big tech’s distorting dominance of the news media, effectively controlling both the pricing and distribution of news production over all but a handful of publications behind a paywall, has long vexed the news industry.
In 2009, Google News had approximately 24 million monthly unique visitors in the US, compared with 50 million for both CNN and the New York Times. By May 2018, Google had approximately 150 million unique monthly visitors in the US, close to double the numbers for CNN and the New York Times.
Chavern will present the news media’s case for a more equitable distribution of revenue before a congressional anti-trust subcommittee tomorrow, which is looking at the relationship between big tech companies and the media.
The alliance hopes the outcome will be the passage of the Journalism Competition and Preservation Act, a bill that would give news publishers a four-year antitrust exemption, allowing them to collectively bargain with the owners of online platforms over revenue splitting.
The alliance argues that the new study first and foremost establishes the public’s demand for news.
“News content certainly drives a lot of user behavior,” Chavern told the Guardian. “If anything, the value to Google we’ve put on it is conservative, and I’m sure if you were at Google looking out, the number would strike you as conservative.”
Chavern argues that both Google and Facebook could be good partners to the news business – if they chose to be.
According to the report, since January 2017, traffic from Google Search to news publisher sites has risen by more than 25% to approximately 1.6bn visits per week in January 2018.
Chavern describes Google and Facebook as “wonderful distribution systems” that are failing to honor their side of the content creation–content distribution deal. Indeed, the report argues, with consumers’ shift toward Google for news consumption, news is becoming increasingly important to Google to keep consumers within its digital domain.
However, that growing dependence does not translate to greater revenue for publishers. Chavern said: “They just need to work with us to build a sustainable digital future for news and they haven’t been willing to do that yet.”
The Alliance points out that the digital platforms are accustomed to paying for content – music, for instance – and argues that news should be no different. But when the digital platforms have been approached, Chavern said: “They say a lot of nice things but steadfastly refuse to pay for or improve the economic deal for news.”
It’s possible that may change. Building political and regulatory pressure on big tech, including calls for Facebook to be broken up and widespread alarm over the role of the proliferation of fake news and its role in distorting the democratic process, has forced big tech on to the defensive.
In recent weeks, Facebook’s chief operating officer, Sheryl Sandberg, has mounted what amounts to a media apology tour for not doing enough to combat election meddling, hate speech and the spread of misinformation – and to argue that Facebook should not be broken up by regulators.
